Predictive Analytics: How to Effectively Measure and ......FICO holds 185+ patents in analytics and...

© 2019 Fair Isaac Corporation. Confidential. 1© 2019 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

Predictive Analytics: How to Effectively Measure and Improve Fleet Driving Risk

Rachel BellVice President, Scores and AnalyticsFICO

Jim NobleDirector, Insurance and Commercial Fleet ServiceseDriving

© 2019 Fair Isaac Corporation. Confidential. 2© 2019 Fair Isaac Corporation. Confidential. 2

Despite advancements in safety technology, road fatalities are on the

rise and results continue to deteriorate.

Society has becomedesensitizedto the problem.

© 2019 Fair Isaac Corporation. Confidential. 4

Adaptive control systems for managing credit card accounts

Cross-bureau FICO®

credit scores

Neural network-based fraud solutions

Small business scoring systems

Cardholder profiling for fraud

1990s

Credit line optimizationsolutions

Predictive systems for

insurance fraud

Analytic systems for retailers to optimize

offers

Adaptive analytics for fraud

Credit capacity scores

2000s

Cloud-based decision management platform

World’s fastest optimization solver

Self-calibratinganalytics for fraud

Economically calibrated credit scores

Safe Driving Scores

2010s

FICO holds 185+ patents in analytics and decision management

technology, with an additional 90+ patents pending

Automated origination systems with analytics

Credit scoring

1950s–1970s

Insurance underwriting pricing/analytics

FICO® Score for credit lending

introduced

1980s

© 2019 Fair Isaac Corporation. Confidential. 5

eDriving Pedigree

• Providing risk products to insurance carriers for 25 years

• Launched first on-line driver risk aggregation tools

• Established global footprint

• Released first successful integration with a leading commercial telematics insurance product

• Manage successful risk reduction programs for some of the biggest global customers

• Covers 35 to 40% of the world's commercial vehicles through our current insurance partners

© 2019 Fair Isaac Corporation. Confidential. 6

We are THE global fleet risk management gurus.We change driver and manager behavior as we support the creation of a crash-free culture®.

© 2019 Fair Isaac Corporation. Confidential. 7

Creating a Company-wide Crash Free Focus & Culture

© 2019 Fair Isaac Corporation. Confidential. 8

Commercial Insurance Telematics Success?

D

N

LFE

C

KJ

I

O

A

B

H

G0

0.5

1

1.5

2

2.5

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2

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Why is commercial auto underperforming?

• The common factor >94% of all auto losses

• What have we done to reduce this exposure?

© 2019 Fair Isaac Corporation. Confidential. 10 © 2019 Fair Isaac Corporation. Confidential.

Is Insurtech the Answer?

• Recent Results

• What’s missing?

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Risk vs. Pricing

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It’s about...

Missions• Culture• Assessment• Data• Targeted Risk Reduction• Benchmarking

Policy

Leadership

Manager Engagement

Risk Assessment

Driver Engagement

Measurement of Progress

Interventions Fleet Safety

Performance Measurement

Developing a Company Wide Crash Free Focus & Culture

© 2019 Fair Isaac Corporation. Confidential. 13

Driver PortalRank Ordering of Drivers

Coaching Tools

ManagerToolkit

Outputs

Predictive Models - Scoring

Aggregated Data + Scoring

FICO® Safe DrivingScore

Risk Assessment Outcomes

In Vehicle Intelligence

with Distraction Detection

CollisionData

Incident Data

MVR/License Checks

Inputs

© 2019 Fair Isaac Corporation. Confidential. 14

Leveraging Telematics for Predictive Modeling

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Predictive Analytics Simplifies Data to Amplify Value

© 2019 Fair Isaac Corporation. Confidential. 16

CO

NT

EX

T

Frequency

Duration

Severity

Acceleration

Braking

Cornering

Distraction

Speeding

Driving Behaviors Captured through Telematics

© 2019 Fair Isaac Corporation. Confidential. 17

Predictive Analytics Simplifies Data to Amplify Value

Driving behaviorsare observed

Driver #2: Smooth Sally ?

?Driving outcomes

(e.g., collisions) are predicted

Driver #1: Reckless Rick

© 2019 Fair Isaac Corporation. Confidential. 18

Segmenting Risk

GreatGoodAverageRisky Poor

© 2019 Fair Isaac Corporation. Confidential. 19

• A predictive score that rank-orders drivers’ likelihood to be involved in future incident or collision.

• Based on driving behaviors as measured through smartphone sensors

• Acceleration, Braking, Cornering, Distraction, Speeding

• Validated using data from 2nd Strategic Highway Research Program*, a large driving study with 3,500+ participants

and nearly 32 million miles of driving data.

• Corroborated high importance of Acceleration and Braking variables.

• Amplified contribution of Cornering variables.

• Overall, improved collision prediction by 18%.

• Drivers with low scores have a much higher crash involvement rate

than drivers with high scores.

FICO® Safe Driving Score

FICO® Safe Driving Score

Low High

https://insight.shrp2nds.us/*

© 2019 Fair Isaac Corporation. Confidential. 20

Engaging the Driver

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Success Evolved.Mentor by eDriving with FICO® Safe Driving Scores

© 2019 Fair Isaac Corporation. Confidential. 22

MentorDashboard

Benchmark Scores

Individual FICO® Safe Driving Score

Total Miles/Kms., Hours & Trips

Mentor Behaviors – A, B, C, D, S

Coaching Playlist –Modules To DO

Circle Teams –Business & Private

Last Trip Overview, Feedback, FNOL

Mentor Menus, Privacy, Trends

Mentor by eDriving with FICO® Safe Driving Score

© 2019 Fair Isaac Corporation. Confidential. 23

Training – Risk Reduction

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• Interactive ‘live video’ training

• Contextual, relevant, highly engaging micro training modules

(3-15 mins) help drivers practice making decisions in real-life

scenarios

• Core training –prescribed to ALL drivers to provide solid

foundation and/or refresher

• Targeted training – assigned to individual drivers to address

specific risk patterns

Training modules are taken in-app on a smartphone or tablet – anywhere, anytime.

Driver Training

© 2019 Fair Isaac Corporation. Confidential. 25

High Impact – Micro Learning

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Case Study Results

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CASE STUDY: Pilot Program Results

• Pilot group chosen based on leadership engagement & need

• 3 Regions – 500+ Drivers – 6 Months

• Statistically significant CPMM reduction of 30% versus an increase in the non-pilot Regions

• Sustained CPMM reduction came when focus was put on on-time coaching completions and quality reviews/manager follow-up

27

Comparison of CPMM

© 2019 Fair Isaac Corporation. Confidential. 28

CASE STUDY: 2019 North America Rollout

• Executive Safety Leadership Council support for expansion

• Focus on US and Canada only; greatest risk & most drivers

• ~12,000 drivers

• 10 divisions

• In-person, hands-on manger training

• System & data

• Coaching process

• Coordinated rollout around already scheduled manager meetings to minimize expense & field productivity impact

28

© 2019 Fair Isaac Corporation. Confidential. 29

CASE STUDY: Vehicle Accidents and Risky Driving Behaviors

Drivers with accidents had significantly more risky driving behaviors compared to drivers without accidents

29

Accident Recorded?

© 2019 Fair Isaac Corporation. Confidential. 30

CASE STUDY: Speeding and Vehicle Accidents

Drivers with more speeding events are at higher risk for vehicle accidents

30

4.8%

5.6%6.2%

6.5%

0.0%

2.0%

4.0%

6.0%

8.0%

% o

f D

rive

rs w

ith

Ac

cid

en

ts

Distribution of Speeding Events

1st Quartile 2nd Quartile 3rd Quartile 4th Quartile

© 2019 Fair Isaac Corporation. Confidential. 31

CASE STUDY: Vehicle Accidents and FICO® Safe Driving Score

31

Drivers with a FICO® Safe Driving Score of 710 or below were more likely to have an accident in the following months

0.9%

1.7%

2.5%

1.7%

2.8%

3.4%

0.0%

0.8%

1.6%

2.4%

3.2%

4.0%

Accident Next Month Accident in Next Two Months Accident in Next Three Months

% o

f E

mp

loye

es

Above 710 Below 710

© 2019 Fair Isaac Corporation. Confidential. 32

CASE STUDY: CPMM Performance

32

Baseline After Deployment

CP

MM

© 2019 Fair Isaac Corporation. Confidential. 33© 2019 Fair Isaac Corporation. Confidential. 33

Engaging the driver is essential to changing their driving behavior and

improving the risk.

© 2019 Fair Isaac Corporation. Confidential. 34© 2019 Fair Isaac Corporation. Confidential.

This presentation is provided for the recipient only and cannot be reproduced or shared without Fair Isaac Corporation’s express consent.

Thank You

Jim NobleJim.Noble@edriving.com+1 (719) 466-1506

Rachel BellRachelBell@fico.com+1 (415) 491-7055

© 2019 Fair Isaac Corporation. Confidential. 35

WHO Global Status Report on Road Safety 2018

https://www.who.int/violence_injury_prevention/road_safety_status/2018/en/

© 2019 Fair Isaac Corporation. Confidential. 36

NSC Motor Vehicle Fatality Trends

https://injuryfacts.nsc.org/motor-vehicle/historical-fatality-trends/deaths-and-rates/

© 2019 Fair Isaac Corporation. Confidential. 37

What are the numbers?

Source: https://crashstats.nhtsa.dot.gov/Api/Public/ViewPublication/812115

© 2019 Fair Isaac Corporation. Confidential. 38

Acceleration Braking Cornering Distraction Speeding

• Collects & analyzes data for the most predictive driving

behaviors using the smartphone’s accelerometer and GPS

sensor

• Incorporates positive behaviors (smooth maneuvers), as

well as risky maneuvers –Acceleration, Braking, Cornering,

Distraction (Calls, Texting, Emailing, Handling), & Speeding.

• Reflects trip distance and duration

• 7-day rolling score

Mentor Behaviors

© 2019 Fair Isaac Corporation. Confidential. 39

• FICO Trip/Event feedback• Where and when each event occurred• Duration of each event• Speed driven Vs speed limit of the road• Trip rating (FICO® Safe Driving Score)• Total number of events• Start & end locations• Distance traveled/time elapsed• Summary of last 30 Trips

• PRIVACY: Driver Managers/Administrators/

Employer can only see FICO® Safe Driving Score,

Mentor behavior sub-scores and event counts –

No Location/mapping data is shared.

Driver View/Trip Details